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Topic: Working for a PE owned firm (Read 874 times)

Got a call from a recruiter and was excited about what he was presenting, but then after I asked if the position reports to the CFO, who he said I would interview with if things went forward, he shared to the fact that it was little murky because their firm is PE owned and therefore, yes there would be reporting to the CFO but also in some way into the PR firm. I've gotten through the couple rounds at the recruiter and they say they are presenting me to the CFO next week. Doing a little research, and talking to a friend of mine who is pretty business savvy, my excitement is getting a little tempered. Seems this job might be more of a nightmare than anything I've ever looked at before.

Anyone have input on this? Worked, or work, for a PE owned firm? Friends or relatives who do? While things could be better here at work, I have a job and it is the typical never really secure stuff as well as some difficult management. I do not want to trade the devil I know for what is starting to seem like the devil I do not but research is telling me is more likely to really be a devil.

I read a few things on the strange offers these firms give because everything is about ROI. They have already mentioned things like a small team and need to take things to the next level, which I've learned are pretty typical in these structures with the goal to sell the company off in a few years as that is the only way to get the return for the PE firm.

Given the financial acumen of this community, I am expecting some solid feedback that I will likely not find anywhere else.

I worked for a PE oil & gas company for several years. That job was a significant contributor to achieving FIRE. It was also a miserable experience. Since the world of PE encompasses such a huge variety of positions, industries and comp structures, Iím not sure how relevant or useful my experience would be to your situation but if you have specific questions I will try to answer them.

Someone I am close to has worked for software companies that got PE involved -- in the first case, I think there was a takeover of a medium sized company by their larger competitor, and it didn't go well, and then PE was brought in. Things went from bad with the original takeover to worse with PE control. They moved to a small company that had spun off the original company they started with -- working largely with the same small team of people who they liked at original company. Then a few years in there was another buyout by a larger competitor, though this time I think the PE firm was involved from the beginning. It hasn't been as bad, but there are still issues with creeping big-corp like behavior even though this is still a relatively small company. The person I know would have preferred they not be acquired.

Generally I don't see how PE deals can work out well in the long run -- the focus is so much on rapid growth and short-term profits. It rarely is sustainable.

Thanks for the input. I am unhappy where I am at, but that is more based on our new CEO and his draconian methods and less on the organization itself. So while I am in a situation I'd like to get out of, I certainly don't want to go from the proverbial frying pan into the fire because a new job comes along and I move from one unpleasant situation to a miserable one. One colleague I know who has his brother as reference in a PE situation in his industry has basically shared with me that good people who can get a job almost always stay away from PE situations, for exactly the ending point that lhamo points out. The pressure is all on results and you are never given the money or resources to do the job well and if you can't do it, they fire you and find another sucker, but always ask for $10 million dollar results with $1 million dollar spend (meaning they provide 10% of what would be needed to even have a chance at success). I'm still waiting to hear back from them on next steps and maybe will not, but I am just trying to get some input from people with less emotion in the situation as I have being in a position I'd like to change.

So far, it seems you've both validated what I had heard or read in some research I did on the topic.

I worked for a very large company that was sold to a PE firm, that to it public, but retained the PE management.

A key is that the company is all about the numbers, and even the numbers from quarter to quarter. The goal is to have sales (or other key measure) up, and debt down. They do not invest in longer term asset management, "nice" human resource employee friendly things. They will invest heavily in ensuring that workplace safety, harrassment, policies and procedures are in place, as future investors are highly turned off by any scent of poor accounting or work place practices that border on legal issues.

One example of the quarterly bottom line driving business -- all travel expenses and many projects were cut / denied in the last quarter of each year if the net revenue projections were looking anything less than spectacular. Arbitrary slashing of expenses (non-regulatory) to make the numbers on the final statement work. They would sell off property that had long term operational value and move into a short term lease in order to keep the numbers looking good.

If you are up for decisions to be based only on numbers, like the idea of fully supporting and driving sales and having that be a common goal for all people in the team, and achieiving results by putting in effort.... it can be a good place to be.

If you do this, you need to negotiate very clear bonus / retention or "golden handcuff" pay outs. (whatever makes sense for your job) More effort and more results from you = more money. They are smart enough to be very tight fisted and your best position to negotiate is during the job offer.

ETA -- if they have just bought a smaller company, then be prepared for a lot of job layoffs. They will want to aggressively trim staff, replace with their own people (you?) and change the way that they operate. Unless, the company is growing so rapidly they can't get rid of staff, but it is easier for PE to get new people than to change the old ones.

The small company I worked for was bought by a PE firm - it was bad. Everyone who worked there was some variety of terrible (incompetent, heartless, negligent, didn't communicate, asshole, etc.). The only good thing about it was the great health insurance... which I'm currently enjoying via COBRA after they laid me off of the job I'd been in for 19 years.

If you do this, you need to negotiate very clear bonus / retention or "golden handcuff" pay outs. (whatever makes sense for your job) More effort and more results from you = more money. They are smart enough to be very tight fisted and your best position to negotiate is during the job offer.

This. I work in this industry and the most likely result is that your employer will get sold again (thatís how the bulk of the money is made). This is likely to mean you will be out of a job. If you can, try to negotiate a bonus upon ďchange of controlĒ of the company (use that phrase). A recruiter in this context means that they really need a candidate. Donít be afraid to negotiate for a good chunk of money. PE folks are motivated by it, and they do not take offense if you talk black and white (or green) when it comes to compensation.

There is an upside here. If you report to the CFO, your normal career progression could be to become a CFO-type consultant who either acts as interim CFO or right hand person to the CFO in newly acquired companies. This could become a good pre-FIRE (or even post-FIRE) gig.

Thanks for the new info. The company wanted someone with specific industry experience I did not have so this dried up several weeks ago (just before Thanksgiving). Good info to have in the event it is ever need though. Thanks!